TPE resin prices, Sept. 10-14: PE flat, PP mixed; Material availability improves, but supplies remain tight

Commodity resin prices were steady to slightly higher, as trading activity improved and widespec availability increased. Plastics spot-trading platform, The Plastics Exchange (TPE) noted that Generic Prime railcars remain elusive, although some material began to appear at the end of the week. Polyethylene (PE) contracts are mostly flat in September. Processors who saw prices only go up $0.03/lb in August will see an additional $0.02/lb added this month, bringing the market up $0.05/lb industry wide for August/September. August polypropylene (PP) contracts followed monomer down $0.015/lb, but seem likely to reverse in September and jump $0.025-$0.04/lb.

TPE resin prices, Sept. 14, 2012

Energy markets rallied in active trading, as October crude oil futures pierced above the $100/bbl level for the first time since early May, before easing a bit to settle the week at $99/bbl, a gain of $2.58/bbl. October natural gas futures soared 10% to settle at $2.943/mmBtu on Friday. The crude oil : natural gas ratio expanded further to nearly 37:1.

Ethylene spot prices fell in volatile trading, and the market began the week under pressure. Material for prompt delivery traded down to $0.5875/lb, almost $0.03/lb below the previous week's close. The market bounced back a bit mid-week, before giving way again by Friday, last transacting at $0.575/lb, a loss of about $0.04/lb. The entire forward curve dropped but remained backwardated with December ethylene priced around $0.55/lb and next September indicated just below $0.50/lb. Ethane prices were fairly steady as $0.3225/gal ($0.135/lb). TPE CEO Michael Greenberg noted that there are "a couple" of crackers scheduled to come offline in the next few weeks for planned maintenance.

Polyethylene (PE) prices were fairly flat while both supplies and buying interest were more apparent, and overall, it was a more active week compared to the week before. Overall spot availability is still limited, and some resellers with warehoused inventory raised their prices again, while others were more liberal and meeting bids to move material. September contracts will mostly roll steady, according to Greenberg, although those customers that only took a $0.03/lb increase in August will pay up another $0.02/lb, aligning their increases with the rest of the industry. There are nominations for as much as $0.06/lb on the table for October.

Propylene's spot market for September delivery traded steady at $0.5375/lb early last week. Prices then eased as the week progressed and were last offered at $0.525/lb on Friday. September contracts were still not settled at mid-month, but have been nominated to increase $0.025-$0.04/lb from the $0.505/lb August price. Refinery grade propylene (RGP) last transacted at $0.39/lb, still within the $0.04 - $0.05/lb range seen the past couple of months.

Polypropylene (PP) spot prices were mixed last week. PP homopolymer, which remains scarce, added $0.005/lb, while copolymer availability increased, particularly for widespec, helping push prices down. Some Generic Prime railcars began to emerge at the end of the week, however, asking prices were relatively high and beyond the reach of buyers. September PP contracts should be up $0.025 -$0.04/lb depending on the polymer grade propylene (PGP) monomer settlement, which would more than erase the $0.015/lb drop that was seen in August.

Final thought from Michael Greenberg

After a slow start to the month, the spot resin markets perked up. Material availability began to improve, but overall spot supplies are still considered light. Buyers seem to be gravitating more towards their contract purchases where prices will be steady to modestly higher and considered competitive. Export trading opportunities are still limited based on both scant offerings and higher prices.